April 11 (Bloomberg) — Companies spent $25 billion building U.S. wind farms last year, more than double the budget of the Coast Guard and overtaking the gun industry, a trade group said.

Wind accounted for 5.6 percent of U.S. electricity generating capacity in 2012, up from about 3 percent in 2011, according to a report today from the Washington-based American Wind Energy Association. Developers installed 13.1 gigawatts of wind capacity last year, surpassing natural gas power plant construction to become the largest new source of electricity.

The growth is driven by tax incentives, utility demand, falling costs and better technology including taller towers and lighter blades, Elizabeth Salerno, AWEA’s chief economist, said in an interview.

“Wind is going to continue to be a major contributor as we add new power resources to our electricity grid in the U.S.,” Salerno said.

The fourth quarter accounted for 60 percent of installations as developers raced to take advantage of the expiring production tax credit. The 2.2 cents a kilowatt-hour incentive was extended for a year at the start of 2013. The rate was increased to 2.3 cents this month because of inflation.

Wind power is becoming more common in the Midwest and Great Plains. Kansas gets 11.4 percent of its power from wind after doubling its capacity last year. In 2000, 60 percent of the nation’s wind power capacity was in California, compared to about 9 percent now. Thirty-nine states are producing wind power.

Top State

Iowa gets 24.5 percent of its power from wind, the most in the country, followed by South Dakota at 23.9 percent and North Dakota’s 14.7 percent. About 3.5 percent of the country’s electricity comes from a total of 45,000 wind turbines.

U.S. investment in wind projects rose 76 percent from the $14.2 billion spent in 2011, AWEA said. By comparison, the fiscal 2012 budget for the Coast Guard was $10.2 billion and the direct economic impact of the U.S. firearms industry and its suppliers was $22.3 billion last year, according to a report by the National Shooting Sports Foundation, the industry’s trade association.

NextEra Energy Inc., the largest U.S. developer of renewable energy, installed 1.3 gigawatts of capacity. The Juno Beach, Florida-based company is also owns the most wind capacity, with 9.8 gigawatts, about 16.4 percent of the total in the U.S. Iberdrola SA followed with a 9.1 percent share and Warren Buffett’s MidAmerican Energy Holdings Co. had 6.2 percent.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net